Latin America is new hotspot for growth - Manpower

LaurenceIliff

PUERTO VALLARTA, Mexico -(MarketWatch)- With Europe struggling under its debt burden and the U.S. facing years of relatively high unemployment, Latin America is becoming the new hot spot for economic growth because of a youthful demographic and rising middle class, Jeffrey Joerres, chairman and chief executive of ManpowerGroup
MAN, -0.65%
said Wednesday.

"We see Latin America as getting its turn, so to speak," Joerres said in an interview on the sidelines of a World Economic Forum event focused on Latin America.

Joerres, whose company places workers in temporary and permanent jobs in global markets, said some euro-zone nations have to confront the complicated task of cutting spending down to austerity levels without choking off growth. Spain and Greece, in particular, "are left with no choice but responsible austerity," he said.

Europe's problems, he added, are far from over despite the Greek debt bailout and Spain's painful economic measures. "Just when you thought it was safe to go back into the water, Europe is stumbling," Joerres said, with growth in gross domestic product around zero.

The U.S. still has time to avoid heading down the European road of too much debt by tackling both spending and revenue, he said, but no politician wants to be the first to propose tough medicine. "Fix expenses, raise taxes, do it together," Joerres said.

Still, the Manpower leader doesn't see the U.S. unemployment rate coming down any time soon. The real unemployment rate--including discouraged workers out of the labor force--is around 15% to 16%, he said, and it isn't going to come down quickly. "The U.S. wants to get going, but there is no economic reason for it," he said.

Meanwhile, Latin American countries such as Mexico, Brazil and Colombia have good demographics, with lots of young workers and a developing middle class, Joerres said. "Latin America has a window that has opened."

The region has the best demographics in the world for sustained growth outside of Africa, but Latin America has much more to offer on a general basis, he added. U.S. companies that once had been eager to open operations in Asia are now saying "I already have that" and are looking south for a lot of reasons, including geographic proximity and similar time zones, the executive said.

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